‘Re-engagement on P’nyang, very positive for PNG’ - Smaré

by PNG Business News - September 09, 2021

President of the Papua New Guinea Chamber of Mines and Petroleum, Anthony Smaré, has applauded the Marape-Basil government, Petroleum Minister Kerenga Kua, ExxonMobil PNG, and their joint venture partners for agreeing to reengage in negotiations on the P’nyang project in Western Province.

Mr. Smaré said “In light of the extremely challenging economic conditions in PNG, the P’nyang and Papua LNG projects, are projects that are desperately needed to be kick-started to kick-start the country’s stagnant economy creating jobs, bringing in foreign exchange and providing opportunities for PNG businesses, particularly SMEs in the impacted areas”.

“I congratulate the Prime Minister, Minister Kua, the SNT and Exxon Mobil and its partners for restarting these negotiations, and strongly encourage them to secure a win-win outcome that sees the progress of the P’nyang project in the near term, and in turn helping PNG and our people.”

In making the announcement of re-engaging in negotiations on P’nyang, on August 20###sup/sup###, Petroleum Minister Kerenga Kua highlighted the economic importance of these two projects alone.

“The benefits of phasing the construction of both Papua and P’nyang projects over an eight-year period shall be a substantial boost to the economy and the country.

“This tremendous investment would extend our gas pipeline infrastructure into the country’s Western Province and have a meaningful and lasting economic impact for Papua New Guinea and its people,” Minister Kua said.

He also announced that there would be a series of workshops regarding the development of the P’nyang Gas Fields, and if these continued unhindered, an expected signing of a P’nyang Heads of Agreement could be expected by end of this month, with a Gas Agreement to follow.

“While there continues to be misinformation on the true impact of resource projects in the country, the government remains fully aware that projects which remain in the pipeline, will not be able to effect much financial benefit, until they are negotiated and commissioned.

“This announcement by government of re-engaging with ExxonMobil PNG and its joint venture partners on the P’nyang project, is an extremely positive step in the right direction,” Mr. Smaré said.


Article Courtesy of the PNG Chamber of Mines and Petroleum 

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PNG Business News - September 24, 2021

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The talks between ExxonMobil and the government on the P'nyang gas project have been hailed as "good" by Prime Minister James Marape. Last month, the two companies signed a letter of intent to commence project talks. “ExxonMobil will be resuscitating conversations on the P’nyang gas fields which is up north from the present PNG LNG. P’nyang will be brought back to the table,” he said. Marape just departed the nation to attend the UN General Assembly in New York and continue discussions with the firm. “If I could win above present thresholds, as far as where our laws allow or winning better than the PNG LNG and Papua LNG, we will come back with news on how P’nyang will be,” he said. “But we will be pushing hard on ExxonMobil.” ExxonMobil and the State Negotiating Team are “in excellent discussions,” according to Marape, based on the indications received. “Hopefully, my showing-up in Houston, Texas, the headquarters of ExxonMobil, will cement how the future of P’nyang will be, subject to how the negotiations will come to a conclusion,” he said. “It might be a win/win for us, a win/win for them that embraces also the PNG LNG area footprint and the legacies that we are living with as far as the PNG LNG project is concerned.” Marape said once negotiations with ExxonMobil were completed, “we should (know) how P’nyang will feature”. He estimated that the Papua LNG project will be completed in 2024/ 2025. “We would like to extend the construction phase in the LNG sector to two, three years, piggybacking on the possibility of bringing P’nyang into the picture.”   Reference: The National (21 September 2021). “Discussion on project good: PM”. 

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PNG Business News - June 01, 2021

Government Intends to Move on with P'nyang Gas Project

Photo credit: Santos The National Government is set to concluding all project discussions for the $US11 billion P'nyang gas project by the third quarter of 2021. This, according to Petroleum Minister Kerenga Kua, will provide project partners enough time to obtain Sales and Purchase Agreements (SPA) and achieve a Final Investment Decision (FID) by 2023, when the new LNG project opportunity window to absorb a large amount of LNG from within the area is still available. According to Kua, the project's development may serve as a catalyst for the development of marginal and stranded gas resources and prospects in the Western Papua Basin, which is located in the Western and Gulf provinces. He claimed that the P'nyang deposit, when coupled with the remainder of the stranded gas in the Western Papuan Basin, could provide up to 16 TCF of gas and 200 million barrels of condensate. “Since we have a good traction on Papua LNG project with Total E&P fully committing to it, the Government will now re-appoint a new State Negotiating Team to start reengaging with ExxonMobil,” Kua said. According to him, the initial intention is to build a third LNG train alongside the two Papua LNG trains, each having a capacity and specification of 2.7 MTA of LNG production. “However, the P’nyang gas development will have a huge impact on the monetization of other smaller stranded gas fields in the Western and Gulf provinces and can be aggregated as a stand-alone, used as a backfill for the PNG LNG project together with Juha and Muruk in the Northwest fold-belt as a utilised project, or deliver alongside Papua LNG as initially planned with reference to the set re-negotiation closing date,” Kua said. “The benefits of spreading the construction period for both Papua and P’nyang projects over an 8 years’ period shall be massive for the country.” According to the Field Development Plan and the Open Book Economic Model provided by ExxonMobil, the spread will be over a decade of continuous intense industrial activity before to and after construction, with total Capital Expenditure Investment for P'nyang alone estimated at $US11 billion. “P’nyang Gas Agreement is one of my KPIs as the responsible Minister, and once the new SNT and ExxonMobil agrees on the key fiscal and non-fiscal term sheets, then the Petroleum Advisory Board will be able to convene and make the final recommendation to the Minister off Petroleum either to grant or refuse the application for the Grant of Petroleum Development Licence,” Kua said.   Reference: Post-Courier (21 May 2021). “Government To Advance P’Nyang Gas Project.”

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